Oscillations In Geopolitical Mood Music Affect Price Action

Shifts in sentiment surrounding the Russia-Ukraine standoff continue to affect price action across G10 FX space. Modest risk-off flows took hold as a senior U.S. official told reporters that Russia has lied about its plans to reduce its military presence near Ukraine and has instead deployed 7,000 additional troops along the border. Major currency pairs have quickly unwound reaction moves amid lack of clarity about the outlook for the Ukraine crisis, with lack of hawkish surprises in Wednesday's Fed minutes helping assuage market anxiety.

• The Antipodean currencies lead gains in the G10 basket as we type, albeit by fairly narrow margins. The Aussie dollar has shown a very limited reaction to the domestic labour market report. Part-time jobs drove a surprise overall gain in employment in January, which absorbed marginally wider participation to generate an unchanged headline unemployment rate.
• The yen has already given away its gains registered on the back of Russia headlines. Japan's trade deficit widened more than expected in January as growth in shipments cooled.
• A poor showing from crude oil prices on Wednesday continues to sap strength from the loonie, which sits at the bottom of the G10 pile. Oil slid on the back of optimism surrounding Iran nuclear talks.
• Spot USD/CNH (last CNH6.3294) is probing the water below yesterday's worst levels as we type. Further losses could see the rate close in on Jan 26 cycle low of CNH6.3238.
• U.S. housing starts & weekly jobless claims headline the global data docket today. Central bank speaker slate includes Fed's Bullard & Mester, ECB's Lane & de Cos, Norges Bank's Olsen & Riksbank's Breman.